Question

Dake Corporation's relevant range of activity is 2,900 units to 7,500 units. When it produces and sells 5,200 units, its average costs per unit are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average Cost per Unit $6.50 $3.40 $1.25 $3.50 $0.85 $8.55 $0.65 $0.55 For financial reporting purposes, the total amount of product costs incurred to make 5.200 units is closest to:

Answer 1

Solution:

$76,180

Explanation:

Variable manufacturing cost per unit (6.5 + 3.4 + 1.25)	11.15
Number of units produced	5,200
Total variable manufacuring costs (11.15 x 5200)		57980
Average fixed manufacturing overhead per unit	3.5
Number of units produced	5,200	18200
Total product cost		76180